Harley-Davidson Responds To EU Tariffs

Harley, which sold almost 40,000 motorcycles in Europe previous year, said it planned to absorb those costs rather than pass them onto customers and risk hurting sales.

"Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag", Trump said. "I fought hard for them and ultimately they will not pay tariffs selling into the European Union", U.S. President Donald Trump tweeted on Monday, urging the company to "be patient". Mr. Trump tweeted, "Harley-Davidson said they would move much of their plant operations in Kansas City to Thailand". In response to the new tariffs, Harley-Davidson announced that it would not raise prices in Europe but would instead shift a portion of its production operations outside the United States in order to mitigate the impact of these new measures.

Michael Bolton, a director at United Steelworkers, said: "Harley's desire to improve sales both domestically and abroad predates the Trump administration's tariffs, as does the company's willingness to build assembly facilities overseas to avoid tariffs".

The EU tariffs on exported Harley-Davidson bikes will increase to 31% from 6%, the OEM wrote in a SEC filing on Monday.

In addition to the company's US manufacturing plants, Harley-Davidson also has plants in Australia, Brazil, India and Thailand, according to the company's website.

The filing made no mention on the impact this would have on jobs for current Harley-Davidson employees in the USA, but noted that "Harley-Davidson will provide more details of the financial implications and plans to mitigate the impact of retaliatory European Union tariffs during the company's second quarter earnings conference call on July 24, 2018, at 8:00AM CDT".

The Milwaukee-based company chose to build the Thailand plant previous year after Mr. Trump pulled out from the Trans-Pacific Partnership, which would have lowered import tariffs on its bikes in some of the fastest-growing motorcycle markets in Asia. In January, it said it would consolidate its Kansas City, Mo., plant into its York, Pennsylvania, facility.

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On Monday, the vice president of the European Union's governing body said that Europe and China will form a group aimed at updating global trade rules to address technology policy, government subsidies and other emerging complaints in a bid to preserve support for worldwide commerce. If former employees at the Harley-Davidson Kansas City plant are to be believed, there is some truth to this point.

Trump denied Tuesday that his trade policy was to blame for Harley's decision.

Harley said ramping up production overseas could take at least nine to 18 months.

But Trump's comments on Harley could make for an awkward meeting with Walker, especially if the president renews his attacks. Harley-Davidson say the tariffs will result in approximately $2200 (£1650) being added to the export cost of each motorcycle.

So there are a few misleading statements in the President's tirade of tweets, but let's go back to something he said in the very first one. While Harley Davidson was making bikes in the United States the European Union taxes hurt the USA economy, Harley Davidson, and potential the European Union consume r, if the taxes were passed on.

Earlier today, Trump warned such a move would be the beginning of the end for Harley Davidson. Harley Davidson Motorcycles said it will take a hit of $30 million to $45 million for the rest of 2018, but won't raise prices for customers.

United Steelworkers, which represents some Harley employees and has supported some of the president's tariff announcements, said it does not know yet how the company's decision will affect U.S. employment. "We will now wait for the USA decision on the auto tariffs", an official in Germany's economy ministry said.

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